Five From the Industrial Sector

A New Column for Small-Company Stock Ideas

When visiting clubs throughout the Mid-Michigan Chapter, I find that a common concern is finding small-company stocks to study. Most clubs understand BetterInvesting’s recommendation that these stocks account for one quarter of their portfolio, but club members have difficulty finding appropriate candidates to study.

With this in mind, I have five small companies to suggest for a stock study. I stress that no investment recommendation is intended and that companies of this size — with annual revenues in the range of $500 million and less — are often more difficult to study and more volatile than the typical stock. We try to have these types of stocks in our portfolios, however, because they sometimes can produce dramatic returns.

Here are five stocks in the industrial sector I believe have good enough fundamentals to qualify for further study. Revenues, pre-tax profit margins, dividend yield and average price-earnings values are from the end of the most recent fiscal year.

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Ken Kavula, vice president of the Mid-Michigan Chapter and BetterInvesting Volunteer Advisory Board director, is a retired educator who often presents classes on small-company stocks.